Yeah that makes no sense. He has a lot of stock and wants to sell some.

A short squeeze means you have an obligation to buy shares and not enough are available, that drives the price up like crazy.

I used the wrong words, obviously.

If Tesla stock drops and his loans against Tesla stock go negative, he'll be forced to liquidate more shares to make up the difference to keep the loan afloat... this would then lower the value of the stocks even more, and the positive feedback loop could let all of the air out of his imagined wealth.

In other words - He has effectively sold shares at a price by borrowing against them... if the price falls, he'll have to do something to make up the difference... which is about the same thing as a short-squeeze for him.

It's the same mechanism as a short squeeze, just with the roles of stock and cash swapped. There is likely a specific word for that, but the comparison works.

Squeezed short sellers have an obligation to get a specific stock, but only have cash. There are not enough market participants willing to sell the stock, so the price rises astronomically to their disadvantage.

Elon has an obligation to get cash, but only has $TSLA stock. There are not enough market participants willing to buy the stock, so the price drops enormously to his disadvantage.